Author Topic: Oh edward jones....  (Read 8638 times)

Mad_Scientist_565

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Oh edward jones....
« on: December 28, 2017, 09:00:04 PM »
Hey folks.  I got a situation Im hoping some of you talented investors could help me out with. 

 My company simple ira  is with edward Jones...(gag) so i have to invest there to get the match.   the FA set me up with some ridiculous moshpit of stocks and bonds. Most of which are negative returns this year.  The only thing that made money was a jp morgan growth mutual fund.   I asked him to set me up with some very stable holdings since i want to ensure the cash value remains constant.  I planned to pull the cash out using first time home buyers in 2019.   But now honestly i just don't have a real good feeling about where and how my money is invested or about the FA himself or edward jones in general. The FA seems like a button clicker more than an advisor that just does what the robo advisor tells him.   

Meanwhile...my vanguard accounts are all up this year and doing well.  I'm thinking once i get my annual match i should just roll the funds over to my vanguard IRA(t).   I don't think ill catch to much of a fee for this.    Meanwhile, should i just pick my funds myself and demand the FA change the stocks and bonds to what i picked...his computer advisor be damned. 

Anyways. Just curious what your thoughts might be. 
« Last Edit: December 28, 2017, 09:28:04 PM by Mad_Scientist_565 »

Classical_Liberal

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Re: Oh edward jones....
« Reply #1 on: December 28, 2017, 10:20:21 PM »
Simple IRA's have larger withdrawal penalties than other pretax vehicles for the first two years.  There is a 10K home purchase exemption, but beyond the 10K, I am perplexed why you would use this as your primary vehicle for down payment savings? 

Maybe some more details regarding amounts would help. 

In general, you are still better off using as much pretax space as possible, even if your plan sucks.  However, with a simple IRA, you shouldn't be limited to front-loaded Edward Jones managed funds. 

Increase your knowledge base on investing, as least passive investing.  JL Collins is popular here, I think Tyler's Portfolio Charts site is great too.





Mad_Scientist_565

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Re: Oh edward jones....
« Reply #2 on: December 28, 2017, 11:01:06 PM »
Baiscally i had a lot..(a lot)   of debt.  I'm almost done cleaning it up with only a few hundres bucks left on one auto loan. Im trying to get to  0 debt beyond mortgage. Due to the rental prices in my area, its a neccesity to buy. The ira is basically the entirety of my savings through eoy 2017.   2018 should be much better.  The 10k allowance  plus what I save next year will be used for my down payment.  When my living expenseses are cut by 50% in 2019, i can, and will, replenish my ira savings.  I could buy without using it but i wouldnt have a mortgage im comfortable with.  I wouldnt even use edward jones if not for the employer match. Giving up a few thousand dollars every year is onviously not on the table.  I'm not rich by any means but I do earn close to 80k.

  I'm really just tempted to tell them to put my entire investment into a total market index fund and diversify with my other accounts.  I'm currently saving about 20% of my income through employer 401k and additional roth and standard brokerage accounts with vanguard.  I should be able to increase it to 30% once i buy a house. (With the goal being to buy a house or two for rental in the next 5 -7 years)

TomTX

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Re: Oh edward jones....
« Reply #3 on: December 29, 2017, 09:50:03 AM »
Hey folks.  I got a situation Im hoping some of you talented investors could help me out with. 

 My company simple ira  is with edward Jones...(gag) so i have to invest there to get the match.   the FA set me up with some ridiculous moshpit of stocks and bonds. Most of which are negative returns this year.  The only thing that made money was a jp morgan growth mutual fund.   I asked him to set me up with some very stable holdings since i want to ensure the cash value remains constant.  I planned to pull the cash out using first time home buyers in 2019.   But now honestly i just don't have a real good feeling about where and how my money is invested or about the FA himself or edward jones in general. The FA seems like a button clicker more than an advisor that just does what the robo advisor tells him.   

Meanwhile...my vanguard accounts are all up this year and doing well.  I'm thinking once i get my annual match i should just roll the funds over to my vanguard IRA(t).   I don't think ill catch to much of a fee for this.    Meanwhile, should i just pick my funds myself and demand the FA change the stocks and bonds to what i picked...his computer advisor be damned. 

Anyways. Just curious what your thoughts might be.

Fuck their "computer advisor" - it's designed to suck as much money as possible out of your account while keeping you confused and intimidated.

Again, fuck them.

Find the lowest cost stable fund (bond or money market) for your down payment amount. Put your $10k in there.

For anything else, find the lowest cost, broad based index fund or ETF (like VTI) and instruct them that 100% of anything else goes into that fund.

Then educate yourself on costs (plenty of threads here have hashed it out) and go to your HR department with how shockingly bad EJ fees are compared to Vanguard, which costs something like $20 per person per year.

uwp

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Re: Oh edward jones....
« Reply #4 on: December 29, 2017, 10:02:18 AM »
Can you post your investment options?
What in the world did they have you in that had negative returns this year?

COEE

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Re: Oh edward jones....
« Reply #5 on: December 29, 2017, 02:30:04 PM »
+1 to Liberty Stache and uwp

Take ALL control out of someone else's hands at least until you're comfortable enough having them make your decisions for you (it sounds like you aren't there right now).  Posting your funds and expense ratios will help us in making suggestions in your asset allocation.  Also your risk.

It sounds like you know this, but generally speaking MMM and people here suggest investing in low-cost index funds and spreading them out between stocks and bonds based on your risk profile.

I'd personally consider leaving a company with poor investment options.

honeybbq

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Re: Oh edward jones....
« Reply #6 on: December 29, 2017, 02:39:14 PM »
Can you post your investment options?
What in the world did they have you in that had negative returns this year?

This was exactly my question. Must have been something that INVERSELY tracks the stock market??

Seradoc

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Re: Oh edward jones....
« Reply #7 on: December 29, 2017, 02:43:10 PM »
If the investment options are terrible, just open a traditional IRA somewhere else and transfer cash regularly to the better account.  Or, open a simple IRA elsewhere and have the office wire the money to there instead.

I transfer my simple IRA funds annually into a traditional IRA to take advantage of Admiral funds which are not available in my Vanguard simple IRA.



edit: "transfer", not "rollover" for clarity...
« Last Edit: December 29, 2017, 02:47:38 PM by Seradoc »

Mad_Scientist_565

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Re: Oh edward jones....
« Reply #8 on: December 29, 2017, 02:46:37 PM »
JOHN HANCOCK BOND FUND CL R6

LORD ABBETT HIGH YIELD CL F3

PRUDENTIAL SHORT-TERM CORP BOND FUND CL Q


All show,  small $ losses.  Again i only have a few thousand invested currently.  and those are on top of my annual fee of $40.     The only thing that did ok was

JP MORGAN GROWTH ADVANTAGE FUND CL R6



And this edward jones app is garbage as well

Seradoc

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Re: Oh edward jones....
« Reply #9 on: December 29, 2017, 02:50:55 PM »
If the investment options are terrible, just open a traditional IRA somewhere else and transfer cash regularly to the better account.  Or, open a simple IRA elsewhere and have the office wire the money to there instead.

I transfer my simple IRA funds annually into a traditional IRA to take advantage of Admiral funds which are not available in my Vanguard simple IRA.



edit: "transfer", not "rollover" for clarity...


Apparently there is a two year vesting period of sorts on the simple to traditional movement, so you might want to open another simple elsewhere potentially.  This might be more involved.

Travis

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Re: Oh edward jones....
« Reply #10 on: December 29, 2017, 06:44:27 PM »
JOHN HANCOCK BOND FUND CL R6

LORD ABBETT HIGH YIELD CL F3

PRUDENTIAL SHORT-TERM CORP BOND FUND CL Q


All show,  small $ losses.  Again i only have a few thousand invested currently.  and those are on top of my annual fee of $40.     The only thing that did ok was

JP MORGAN GROWTH ADVANTAGE FUND CL R6



And this edward jones app is garbage as well


S&P500 is at 20.49% YTD


JOHN HANCOCK BOND FUND CL R6: performance - 16.97% YTD; .69 ER

LORD ABBETT HIGH YIELD CL F3: performance - 8.23% YTD; .81 ER

PRUDENTIAL SHORT-TERM CORP BOND FUND CL Q: performance - 2.06% YTD; .52 ER

JP MORGAN GROWTH ADVANTAGE FUND CL R6: performance - 36% YTD;  .64 ER

Where are you seeing negative returns? These funds certainly are nothing that should spark interest, but they're in the black.  The JP Morgan fund is having a spectacular year, but the last few years it has been a roller coaster.

Classical_Liberal

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Re: Oh edward jones....
« Reply #11 on: December 30, 2017, 09:23:37 AM »
If the investment options are terrible, just open a traditional IRA somewhere else and transfer cash regularly to the better account.  Or, open a simple IRA elsewhere and have the office wire the money to there instead.

I transfer my simple IRA funds annually into a traditional IRA to take advantage of Admiral funds which are not available in my Vanguard simple IRA.

edit: "transfer", not "rollover" for clarity...

People are misunderstanding a simple IRA vs a 401K.  OP sorry for this confusion

Your simple IRA may be "through" Edward Jones, but you DO NOT have to invest in Edwards Jones products (with 401K's participants ARE forced to choose from only a few investment options).  See here
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SIMPLE IRA plan contributions can be invested in individual stocks, mutual funds, and similar types of investments. Each employee makes the investment decisions for his or her own account.

In a normal circumstance I would advise you to save for down-payment post tax (In CD or MM), then use as much tax advantaged space as possible in the simple IRA and invest in VTI (or whatever).  Ignore the Edward Jones asshole, tell him you manage your own $ and to go away. 

I'm not sure what you are accomplishing by saving 10K in the simple for a down payment, then withdrawing it a year or two later? Yes, its a penalty free withdrawal, but so what?  Now that tax deferred money is gone and cannot grow tax free!  Tax deferred growth is the main reason these accounts are so important (along with free employer contributions).  EDIT: Unless I misunderstand the exemption and you can withdrawal the 10K totally tax free (not just penalty free), if that's the case then I see the advantage.  Ask an accountant to be sure.
« Last Edit: December 30, 2017, 09:28:33 AM by Classical_Liberal »

Mad_Scientist_565

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Re: Oh edward jones....
« Reply #12 on: January 03, 2018, 08:16:03 AM »
so apparently, according to my broker,  there was some new Dept of labor mandate that went into effect last year.  And with my simple IRA, all the trades have to go through the broker.  There is no way for me to move funds around, or to set buy allocations  from inside my account online.  the best I can do is get the broker to do the trades for me. (very lame)  they call this "guided solutions"  I call it job security.     I'm still not exactly sure how to transfer the funds over to vanguard without penalty.  (which wont really matter until 2019 anyway)

I did tell him that I wanted to be into a total market fund and to send me a list of what they have and Ill let him know where to put the new money.   


This is very unusual to me.  in all my vanguard accounts, even in my roth and traditional IRA's, I can trade with no problem.  As a matter of fact, I was able to make a few trades in my IRA(t) in 2017 that gave it a slightly better return than it would of had.   

Not a fan of edward jones.




in regards to those funds yearly performance, I wasnt invested all year and I think that's why im seeing negatives. again its very small amounts, so im not concerned about it. Im going to sit on them and see how they do next year.  I'm more interested in my employer match than the funds performance at this point. 

Seradoc

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Re: Oh edward jones....
« Reply #13 on: January 03, 2018, 08:32:21 AM »
If you call up Vanguard and describe your situation, I am sure that they will clarify your options and facilitate moving your monies over without fees, if it is possible.

It is in their best interest to acquire your business and I have had great experiences in the past with them taking the reigns regarding rollovers and transfers.

Mad_Scientist_565

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Re: Oh edward jones....
« Reply #14 on: January 03, 2018, 08:38:54 AM »
I think I will do that.

Laura33

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Re: Oh edward jones....
« Reply #15 on: January 03, 2018, 08:45:16 AM »
so apparently, according to my broker,  there was some new Dept of labor mandate that went into effect last year.  And with my simple IRA, all the trades have to go through the broker.  There is no way for me to move funds around, or to set buy allocations  from inside my account online.  the best I can do is get the broker to do the trades for me. (very lame)  they call this "guided solutions"  I call it job security.     I'm still not exactly sure how to transfer the funds over to vanguard without penalty.  (which wont really matter until 2019 anyway)

I did tell him that I wanted to be into a total market fund and to send me a list of what they have and Ill let him know where to put the new money.   

FWIW, I would send them an email or a letter where you (1) lay out what they explained to you ("It is my understanding based on our conversation that I cannot invest in VTSMX/VTSAX through you, and that instead I must allow you to invest my contributions in your managed funds, and that this is due to a new DOL regulation"); (2) ask them to confirm that your understanding is correct; (3) ask them to send you a copy of the regulation and any internal guidance that this conclusion is based on; and (4) ask them to send you the full list of funds/ETFs that they will allow you to invest your own contributions and/or the match in.  Investment companies are well known for making oral representations that they will not back up in writing.  So if this is just their version of obfuscating the truth to persuade you to stay with them, asking them to commit that to writing may clarify what the actual requirements are.

I had a funky situation once where the company required me to put all of my own investments and their match into the company stock.  I pushed back on that, and they later confirmed that in fact, the requirement was only that their match went into the company stock, and I could invest my money in any number of other options.  So don't just rely on the first thing they tell you, especially when it doesn't make sense.

Otherwise, +1 to Classic Liberal.  I would not be at all inclined to withdraw any tax-favored money for a downpayment, because then you lose that tax-deferred growth forever; sure, you can contribute in the future up to the limits, but you can never put back in the money you took out, or make up for any past years in which you did not invest up to the limit.  So if it were me, I'd stick the entire IRA into the lowest-cost broad market index fund they will allow you to invest in, do any diversification in other accounts where you can choose among better/lower-cost funds, and then save for the downpayment in a regular money market account.  Even if that means putting off buying for another few months or a year, you will very likely come out ahead in the end given the benefits of untaxed compounded growth over 30-40+ years.

But if you are insistent on using this money as part of your downpayment, do not put it in a broad-market index fund -- given your intent to buy within a year or so, it needs to be in a money market/stable value fund, or at most an ultra-short-term bond fund.

Finally, don't judge a fund by its short-term performance; that will usually just tell you what market segment is popular.  Judge it by the costs.  If you avoid actively-managed funds entirely, and focus on low-cost index funds or ETFs, you should be just fine.

Another Reader

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Re: Oh edward jones....
« Reply #16 on: January 03, 2018, 09:01:32 AM »
Apparently, this is EJ's answer to the fiduciary rule...

https://www.edwardjones.com/investments-services/wealth-management/guided-solutions/guided-solutions-fund-account.html

Ugh.  You must use their robo advisor, so no one can say you were pushed into unsuitable investments.  And you will be charged a horrific fee for it.

I don't understand how you can have a simple IRA AND a 401(k).  I thought it was one or the other.

Mad_Scientist_565

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Re: Oh edward jones....
« Reply #17 on: January 03, 2018, 09:29:51 AM »
I have a simple IRA from my currently employer.  my IRA's and 401k are all from previous employers, with the exception of one Roth I set up on my own.   I need to roll them up I just haven't done it yet.


 

Travis

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Re: Oh edward jones....
« Reply #18 on: January 03, 2018, 01:42:11 PM »
Apparently, this is EJ's answer to the fiduciary rule...

https://www.edwardjones.com/investments-services/wealth-management/guided-solutions/guided-solutions-fund-account.html

Ugh.  You must use their robo advisor, so no one can say you were pushed into unsuitable investments.  And you will be charged a horrific fee for it.

I don't understand how you can have a simple IRA AND a 401(k).  I thought it was one or the other.

Holy shit. They can't swindle you anymore, so they're just going to extort you instead.


Quote
The Guided Solutions Fund Account Program Fee starts at 1.35% and does not include internal expenses of the investments you own. It covers your financial advisor's services, all trades and rebalancing, the benefit of our diversification guidance and more. Your Program Fee may be lower depending on the value of your assets in the program. Paying an ongoing fee can make expenses more predictable but can be more expensive over time.

Your account is subject to a minimum monthly fee, which could make the Program Fee higher than 1.35%.

This used to be fine-print level stuff, so yah transparency?

Vertical Mode

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Re: Oh edward jones....
« Reply #19 on: January 03, 2018, 02:30:40 PM »
Sounds like your workplace has a 5305-SIMPLE IRA, as mine does. Ours uses American Century, perhaps not quite as bad as EJ in the fees department but certainly not Vanguard, either.

In researching the available options for keeping monies away from high-ER funds, I came across an end-around that might work for you on a Bogleheads thread a while back. You may be able to open a "frozen SIMPLE" through Vanguard, which DOES NOT accept direct contributions, but DOES accept rollovers from another SIMPLE IRA. You can roll over funds from your workplace SIMPLE to the Vanguard one, and I don't believe there are any penalties for doing this since A) it is not going into a different type of retirement vehicle, and B) it does not cross the tax horizon, triggering a taxable event. I've been in touch with Vanguard representatives who confirm that this can be done, and I plan on doing exactly this next year.

Bogleheads Thread Link:

https://www.bogleheads.org/forum/viewtopic.php?t=174294

Hope this is helpful.

-VM

Mad_Scientist_565

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Re: Oh edward jones....
« Reply #20 on: January 04, 2018, 06:19:03 AM »
I called vanguard and they sent me a bunch of paperwork and told me that my employer would need to set up an account with them in order for me to transfer.   I dont think  my employer would do this.   It didnt sound as if there was any way I could transfer on my own...

TomTX

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Re: Oh edward jones....
« Reply #21 on: January 04, 2018, 07:53:55 PM »
I called vanguard and they sent me a bunch of paperwork and told me that my employer would need to set up an account with them in order for me to transfer.   I dont think  my employer would do this.   It didnt sound as if there was any way I could transfer on my own...

Do you have any side-gig income whatsoever? Sell something for $10 on Craigslist?

Set up a SIMPLE IRA as your own business.

Zamboni

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Re: Oh edward jones....
« Reply #22 on: January 04, 2018, 08:22:53 PM »
I'm really just tempted to tell them to put my entire investment into a total market index fund and diversify with my other accounts. 

Do it now. Take the 'clicking' out of his hands immediately.

I agree that this is definitely what you should do for all future contributions. You are going to have to do your research and figure out which of their available total market index funds have the lowest fees. You can use your Vanguard account as a fee baseline.

What out for their front-load fees! Fuckers.